Mar. May 11, 2021

Latino News

Noticias de Hazleton y el mundo

Fundado el 20 de mayo de 2013

Regis Reports Third Quarter 2020 Results Materially Impacted by the COVID-19 Pandemic and Significant Progress in Salon Re-Openings and in Its Transition to a Franchise Model

Regis Reports Third Quarter 2020 Results Materially Impacted by the COVID-19 Pandemic and Significant Progress in Salon Re-Openings and in Its Transition to a Franchise Model

Third Quarter Operating Loss Of $64.3 Million Includes A One-Time, Non-Cash Goodwill Impairment Charge Of $44.5 Million Related To Company-Owned Salons, Non-Cash Goodwill Derecognition Charges Of $19.8 Million Associated With The Sale Of Company-Owned Salons To Franchisees In The Third Quarter, And $7.1 Million Of Other Non-Recurring Discrete Items

Excluding Discrete Items And The Income From Discontinued Operations, The Company Reported Third Quarter 2020 Adjusted Net Loss Of $4.5 Million

The Company Continues To Make Significant Progress In Its Transition To A Fully-Franchised Model With The Sale And Conversion Of An Additional 375 Company-Owned Salons To Its Asset-Light Franchise Portfolio During The Quarter; Year-To-Date, The Company Has Sold And Converted 1,363 Company-Owned Salons To Its Franchise Portfolio

As Of June 15, 2020, Approximately 68% Of The Company’s Salon Portfolio Have Re-opened From Hibernation Caused By The COVID-19 Pandemic

At The End Of The Quarter, Approximately 74% Of The Company’s Salon Portfolio Had Been Franchised

MINNEAPOLIS–(BUSINESS WIRE)–Regis Corporation (NYSE:RGS):

Regis Reports Third Quarter 2020 Results Materially Impacted by the COVID-19 Pandemic and Significant Progress in Salon Re-Openings and in Its Transition to a Franchise Model

 

 

Three Months Ended March 31,

 

Nine Months Ended March 31,

(Dollars in thousands)

 

2020

 

2019

 

2020

 

2019

Consolidated Revenue

 

$

153,783

 

 

$

258,343

 

 

$

609,586

 

 

$

820,849

 

System-wide Revenue (1)

 

$

371,122

 

 

$

444,284

 

 

$

1,249,152

 

 

$

1,360,543

 

 

 

 

 

 

 

 

 

 

System-wide Same-Store Sales Comps (2)

 

(5.4

)%

 

(2.0

)%

 

(2.7

)%

 

(0.1

)%

Franchise Same-Store Sales Comps (2)

 

(4.1

)%

 

(1.3

)%

 

(1.8

)%

 

0.4

%

Company-owned Same-Store Sales Comps

 

(7.9

)%

 

(2.5

)%

 

(3.9

)%

 

(0.4

)%

 

 

 

 

 

 

 

 

 

Operating Loss

 

$

(64,342

)

 

$

(22,162

)

 

$

(81,714

)

 

$

(20,284

)

Loss From Continuing Operations

 

$

(75,338

)

 

$

(14,811

)

 

$

(98,997

)

 

$

(14,857

)

Diluted Loss per Share From Continuing Operations

 

$

(2.10

)

 

$

(0.37

)

 

$

(2.75

)

 

$

(0.35

)

EBITDA (3)

 

$

(65,219

)

 

$

(1,401

)

 

$

(72,047

)

 

$

25,322

 

as a percent of revenue

 

(42.4

)%

 

(0.5

)%

 

(11.8

)%

 

3.1

%

 

 

 

 

 

 

 

 

 

As Adjusted (3)

 

 

 

 

 

 

 

 

Net (Loss) Income, as Adjusted

 

$

(4,481

)

 

$

15,404

 

 

$

14,043

 

 

$

34,760

 

Diluted (Loss) Income per Share, as Adjusted

 

$

(0.12

)

 

$

0.37

 

 

$

0.38

 

 

$

0.79

 

EBITDA, as Adjusted (3)

 

$

5,981

 

 

$

37,158

 

 

$

52,779

 

 

$

82,907

 

as a percent of revenue

 

3.9

%

 

14.4

%

 

8.7

%

 

10.1

%

 

(1) Represents total sales within the system, excluding TBG franchise sales.

(2) System-wide and franchise same-store sales excludes TBG in both periods.

(3) See GAAP to non-GAAP reconciliations, within the attached section titled “Non-GAAP Reconciliations”.

Regis Corporation (NYSE: RGS), a leader in the haircare industry, whose primary business is franchising, owning and operating technology-enabled hair salons, today reported a third quarter 2020 net loss from continuing operations of $75.3 million, or $2.10 loss per diluted share as compared to net loss from continuing operations of $14.8 million, or $0.37 loss per diluted share in the third quarter of 2019. The Company’s third quarter reported results include the following discrete items; a one-time non-cash goodwill impairment charge of $44.5 million related to the Company-owned salon segment, non-cash goodwill derecognition charges of $19.8 million associated with the sale of 375 company-owned salons to franchisees in the third quarter, as well as $7.1 million of other discrete items. The non-cash goodwill impairment charge is driven by changes to the Company’s forecast for the Company-owned segment related to the economic impact of COVID-19 substantially caused by the government mandated hibernations of the Company’s salons. Absent the goodwill impairment charge in the third quarter, the company-owned goodwill would have been derecognized over the course of the vendition timeline. Excluding discrete items, the Company reported third quarter 2020 adjusted net loss of $4.5 million, or $0.12 loss per diluted share as compared to adjusted net income of $15.4 million, or $0.37 earnings per diluted share, for the same period last year. The year-over-year decrease in adjusted net income was driven primarily by the year-over-year decrease in the gain from the sale of salons to franchisees of $17.8 million due to lower proceeds per salon in the current year. The elimination of adjusted net income that had been generated in the prior year period from the 1,581 company-owned salons that were sold and converted to the Company’s asset-light franchise portfolio over the past twelve months also contributed to the decline, but this was partially offset by significant reductions in general and administrative expense and marketing. Additionally, the Company estimates it lost approximately $8 million in margin due to reduced traffic and store closures associated with the COVID-19 pandemic.

Total revenue in the quarter of $153.8 million decreased $104.6 million, or 40.5%, year-over-year driven primarily by the conversion of a net 1,581 company-owned salons to the Company’s asset-light franchise portfolio over the past 12 months. These reductions were partially offset by revenue growth of $18.7 million in the Company’s franchise segment. The Company noted that in connection with the new leasing guidance, it now records franchise rental income and the corresponding rental expense on separate line items. The net impact is a gross up to both revenue and expense with no impact to overall earnings. The impact during the third quarter was an increase in revenue and expense by $31.8 million, with no impact on operating income.

Third quarter adjusted EBITDA of $6.0 million decreased $31.2 million, versus the same period last year. Excluding the $9.6 and $27.4 million adjusted gain from the sale of company-owned salons during the current and prior year quarter, respectively, adjusted EBITDA loss of $3.6 million was $13.4 million unfavorable versus the same period last year. This was driven primarily by the elimination of adjusted EBITDA that had been generated in the prior year period from the 1,581 company-owned salons that were sold and converted to the Company’s asset-light franchise portfolio over the past twelve months, partially offset by significant reductions in general and administrative expense and marketing spend.

Hugh Sawyer, Chairman, President and Chief Executive Officer, commented, “Despite the challenges caused by the pandemic and the government-mandated hibernation of our salon portfolio, we continued to make meaningful progress in all areas of our strategy.” Mr. Sawyer concluded, “We remain committed to our transformation to a fully-franchised model on an expeditious timetable, the removal of non-essential G&A and the deployment of value-enhancing technology.”

Third Quarter Segment Results

Franchise Salons

 

 

Three Months Ended

March 31,

 

Increase

(Decrease)

 

Nine Months Ended

March 31,

 

Increase

(Decrease)

(Dollars in millions) (1)

 

2020

 

2019

 

 

2020

 

2019

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

Product

 

$

15.3

 

 

$

10.6

 

 

$

4.7

 

 

$

43.3

 

 

$

31.3

 

 

$

12.0

 

Product sold to TBG mall locations

 

 

 

3.7

 

 

(3.7

)

 

2.0

 

 

16.5

 

 

(14.5

)

Total product

 

15.3

 

 

14.3

 

 

1.0

 

 

45.3

 

 

47.8

 

 

(2.5

)

Royalties and fees

 

8.7

 

 

22.8

 

 

(14.1

)

 

66.1

 

 

67.8

 

 

(1.7

)

Franchise rental income

 

31.8

 

 

 

 

31.8

 

 

96.9

 

 

 

 

96.9

 

Total franchised salons revenue

 

$

55.8

 

 

$

37.1

 

 

$

18.7

 

 

$

208.2

 

 

$

115.6

 

 

$

92.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Franchise Same-Store Sales Comps (2)

 

(4.1

)%

 

(1.3

)%

 

 

 

(1.8

)%

 

0.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA, as Adjusted

 

$

11.5

 

 

$

9.8

 

 

$

1.7

 

 

$

36.4

 

 

$

28.1

 

 

$

8.3

 

as a percent of revenue

 

20.6

%

 

26.3

%

 

 

 

17.5

%

 

24.3

%

 

 

as a percent of adjusted revenue (3)

 

36.2

%

 

30.2

%

 

 

 

38.0

%

 

26.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Franchise Salons

 

5,126

 

 

4,375

 

 

751

 

 

 

 

 

 

 

as a percent of total Franchise and Company-owned salons

 

73.9

%

 

56.4

%

 

 

 

 

 

 

 

 

Total Franchisees

 

955

 

 

900

 

 

55

 

 

 

 

 

 

 

 

(1) Variances calculated on amounts shown in millions may result in rounding differences.

(2) TBG is excluded from same-store sales in all periods.

(3) Adjusted revenue excludes non-margin revenue. See Non-GAAP reconciliation.

Third quarter Franchise revenue was $55.8 million, a $18.7 million, or 50.5% increase compared to the prior year quarter, and included franchise rental income of $31.8 million due to the adoption of the new lease accounting requirements. Royalties and fees were $8.7 million, a $14.1 million, or 61.8% decrease versus the same period last year. Royalties and fees decreased $14.9 million due to the one-time refunding of previously collected cooperative advertising fees due to the COVID-19 pandemic and government-mandated hibernation of salons. Product sales to franchisees of $15.3 million increased $1.0 million versus the same period last year driven primarily by increased franchise salon counts.

Franchise adjusted EBITDA of $11.5 million grew $1.7 million, or 17.3% year-over-year primarily driven by the increase in salon counts.

Company-Owned Salons

 

 

Three Months Ended

March 31,

 

Increase

(Decrease)

 

Nine Months Ended

March 31,

 

Increase

(Decrease)

(Dollars in millions) (1)

 

2020

 

2019

 

 

2020

 

2019

 

Total Revenue

 

$

97.9

 

 

$

221.2

 

 

$

(123.3

)

 

$

401.4

 

 

$

705.3

 

 

$

(303.9

)

Company-owned Same-Store Sales Comps

 

(7.9

)%

 

(2.5

)%

 

 

 

(3.9

)%

 

(0.4

)%

 

 

Year-over-Year Ticket change

 

2.6

%

 

3.6

%

 

 

 

2.8

%

 

4.4

%

 

 

Year-over-Year Transaction change

 

(10.5

)%

 

(6.1

)%

 

 

 

(6.7

)%

 

(4.8

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA, as Adjusted

 

$

(1.3

)

 

$

17.2

 

 

$

(18.5

)

 

$

14.5

 

 

$

66.1

 

 

$

(51.6

)

as a percent of revenue

 

(1.3

)%

 

7.8

%

 

 

 

3.6

%

 

9.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Company-owned salons

 

1,815

 

 

3,376

 

 

(1,561

)

 

 

 

 

 

 

as a percent of total Franchise and Company-owned salons

 

26.1

%

 

43.6

%

 

 

 

 

 

 

 

 

 

(1) Variances calculated on amounts shown in millions may result in rounding differences.

Third quarter revenue for the Company-owned salon segment decreased $123.3 million, or 55.7%, versus the prior year to $97.9 million. The year-over-year decline in revenue was driven by the decrease of a net 1,581 salons sold and converted to the Company’s asset-light franchise portfolio over the past 12 months, the closure of a net 187 unprofitable salons over the past 12 months, the temporary closure of salons at the end of March due to the COVID-19 pandemic and a decline in company-owned same-store sales of 7.9%. The year-over-year decline in company-owned same store sales was driven by a 10.5% decrease in transactions, partially related to the COVID-19 pandemic, partially offset by a 2.6% increase in average ticket.

Third quarter adjusted EBITDA loss of $1.3 million decreased $18.5 million, or 107.4% versus the same period last year driven primarily by the elimination of EBITDA that had been generated in the prior year period from the 1,581 company-owned salons that were sold and converted to the Company’s asset-light franchise portfolio over the past 12 months, the impacts of the COVID-19 pandemic and the decline in service and product margins, partially offset by a decrease in general and administrative expense and marketing spend.

Other Key Events

  • In January 2020, the Company announced reductions to general and administrative expenses that are expected to save approximately $19 million on an annualized basis.
  • Closure of 90 non-performing company-owned salons in the quarter which were at or near the end of their lease term.
  • In March 2020, the substantial majority of the Company’s salons were closed due to government mandates as a result of the COVID-19 pandemic. Salons began to re-open as permitted by state and local guidance at the end of May. As of June 15, 2020, 3,934 of our franchise salons and 775 of our company-owned salons were open, representing approximately 68% of the Company’s portfolio.
  • In March 2020, the Company decided to waive cooperative advertising fees and refund $14.9 million of contributions previously made to the fund in order to provide needed temporary support to its franchise owners, which benefited the Company’s marketing spend by $1.5 million in the quarter.
  • In March 2020, the Company borrowed approximately $183 million under its unsecured revolving credit facility. The Company borrowed under the credit facility in order to increase its cash position and preserve financial flexibility in light of uncertainty resulting from the COVID-19 pandemic.
  • In May 2020, the Company successfully amended its $295 million revolving credit facility that expires in March 2023. The amendment, among other things, removes all prior financial covenants, including the net leverage ratio and fixed charge coverage ratio, and adds a minimum liquidity covenant. In addition, the amendment provides the Company’s lenders security in the Company’s assets. The amendment gives the Company flexibility to manage the business through its strategic transformation, as well as the uncertainty generated by the COVID-19 pandemic.
  • The Company continues to make meaningful progress on its previously disclosed effort to convert to a fully-franchised model. During the quarter, it sold and transferred 375 company-owned salons to its asset-light franchise portfolio. The Company expects that the economic uncertainty created by the COVID-19 pandemic may impact the number of salons to be sold, the pace of sales to franchisees and the proceeds from the sales. The Company is still committed to converting to a fully-franchise capital-light business.
  • The impact of the transactions closed in the quarter is as follows:

 

 

Three Months Ended

March 31,

 

Increase

(Decrease)

 

Nine Months Ended

March 31,

 

Increase

(Decrease)

 

 

2020

 

2019

 

 

2020

 

2019

 

 

 

(Dollars in thousands)

Salons sold to franchisees

 

375

 

 

245

 

 

130

 

 

1,363

 

 

502

 

 

861

 

Cash proceeds received

 

$

18,502

 

 

$

30,569

 

 

$

(12,067

)

 

$

87,916

 

 

$

54,619

 

 

$

33,297

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain on sale of venditions, excluding goodwill derecognition

 

$

9,628

 

 

$

27,421

 

 

$

(17,793

)

 

$

50,841

 

 

$

43,922

 

 

$

6,919

 

Non-cash goodwill derecognition

 

(19,836

)

 

(15,932

)

 

(3,904

)

 

(72,601

)

 

(33,528

)

 

(39,073

)

(Loss) gain from sale of salon assets to franchisees, net

 

$

(10,208

)

 

$

11,489

 

 

$

(21,697

)

 

$

(21,760

)

 

$

10,394

 

 

$

(32,154

)

Adoption of New Accounting Standard

On July 1, 2019, the Company adopted amended lease guidance. The guidance was adopted on a prospective basis and results in an increase in franchise revenue and franchise rent expense. There is no impact on operating income.

Non-GAAP reconciliations:

For GAAP to non-GAAP reconciliations, please refer to attached section titled “Non-GAAP Reconciliations.” A complete reconciliation of reported earnings to adjusted earnings is included in this press release and is available on the Company’s website at www.regiscorp.com.

Earnings Webcast

Regis Corporation will host a conference call via webcast discussing third quarter results on June 18, 2020, at 9 a.m., Central time. Interested parties are invited to participate in the live webcast by logging on to www.regiscorp.com or participate via telephone by dialing (800) 458-4121 and entering access code 5153028. A replay of the presentation will be available later that day. The replay phone number is (888) 203-1112, access code 5153028.

About Regis Corporation

Regis Corporation (NYSE:RGS) is a leader in beauty salons and cosmetology education. As of March 31, 2020, the Company franchised, owned or held ownership interests in 7,026 worldwide locations. Regis’ franchised and corporate locations operate under concepts such as Supercuts®, SmartStyle®, Cost Cutters®, Roosters® and First Choice Haircutters®. Regis maintains an ownership interest in Empire Education Group in the U.S. For additional information about the Company, including a reconciliation of certain non-GAAP financial information and certain supplemental financial information, please visit the Investor Information section of the corporate website at www.regiscorp.com.

This press release contains or may contain “forward-looking statements” within the meaning of the federal securities laws, including statements concerning anticipated future events and expectations that are not historical facts. These forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The forward-looking statements in this document reflect management’s best judgment at the time they are made, but all such statements are subject to numerous risks and uncertainties, which could cause actual results to differ materially from those expressed in or implied by the statements herein. Such forward-looking statements are often identified herein by use of words including, but not limited to, “may,” “believe,” “project,” “forecast,” “expect,” “estimate,” “anticipate,” and “plan.” In addition, the following factors could affect the Company’s actual results and cause such results to differ materially from those expressed in forward-looking statements. These factors include a potential material reduction in revenue from our company-owned and franchised salons as a result of the uncertain duration and severity of the COVID-19 pandemic, as well as the health of our stylists, customers and employees; the continued ability of the Company to implement its strategy, priorities and initiatives including the re-engineering of our corporate and field infrastructure; our franchisee’s ability to attract, train and retain talented stylists; financial performance of our franchisees; acceleration of sale of salons to franchisees; if our capital investments in technology do not achieve appropriate returns; our ability to manage cyber threats and protect the security of potentially sensitive information about our guests, employees, vendors or Company information; the ability to operate or sell the salons transferred back from TBG; the outcome of the review by the administrator in TBG’s insolvency proceedings in the United Kingdom; the ability of the Company to maintain a satisfactory relationship with Walmart; marketing efforts to drive traffic; changes in regulatory and statutory laws including increases in minimum wages; our ability to maintain and enhance the value of our brands; premature termination of agreements with our franchisees; reliance on information technology systems; reliance on external vendors; consumer shopping trends and changes in manufacturer distribution channels; competition within the personal hair care industry; changes in tax exposure; changes in healthcare; changes in interest rates and foreign currency exchange rates; failure to standardize operating processes across brands; financial performance of Empire Education Group; the continued ability of the Company to implement cost reduction initiatives; compliance with debt covenants and access to existing revolving credit facility; changes in economic conditions; changes in consumer tastes and fashion trends; exposure to uninsured or unidentified risks; reliance on our management team and other key personnel or other factors not listed above. Additional information concerning potential factors that could affect future financial results is set forth under Item 1A on Form 10-K. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. However, your attention is directed to any further disclosures made in our subsequent annual and periodic reports filed or furnished with the SEC on Forms 10-K, 10-Q and 8-K and Proxy Statements on Schedule 14A.

REGIS CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)

(Dollars in thousands, except per share data)

 

 

 

March 31,
2020

 

June 30,
2019

ASSETS

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

241,037

 

 

$

70,141

 

Receivables, net

 

27,602

 

 

30,143

 

Inventories

 

59,029

 

 

77,322

 

Other current assets

 

23,211

 

 

33,216

 

Total current assets

 

350,879

 

 

210,822

 

 

 

 

 

 

Property and equipment, net

 

65,880

 

 

78,090

 

Goodwill

 

226,666

 

 

345,718

 

Other intangibles, net

 

7,568

 

 

8,761

 

Right of use asset

 

861,569

 

 

 

Other assets

 

38,227

 

 

34,170

 

Non-current assets held for sale

 

 

 

5,276

 

Total assets

 

$

1,550,789

 

 

$

682,837

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable

 

$

39,120

 

 

$

47,532

 

Accrued expenses

 

43,475

 

 

80,751

 

Short-term lease liability

 

149,482

 

 

 

Total current liabilities

 

232,077

 

 

128,283

 

 

 

 

 

 

Long-term debt, net

 

273,000

 

 

90,000

 

Long-term lease liability

 

727,245

 

 

 

Long-term financing liabilities

 

28,233

 

 

28,910

 

Other non-current liabilities

 

92,698

 

 

111,399

 

Total liabilities

 

1,353,253

 

 

358,592

 

Commitments and contingencies

 

 

 

 

Shareholders’ equity:

 

 

 

 

Common stock, $0.05 par value; issued and outstanding 35,566,206 and 36,869,249 common shares at March 31, 2020 and June 30, 2019, respectively

 

1,778

 

 

1,843

 

Additional paid-in capital

 

21,186

 

 

47,152

 

Accumulated other comprehensive income

 

6,998

 

 

9,342

 

Retained earnings

 

167,574

 

 

265,908

 

Total shareholders’ equity

 

197,536

 

 

324,245

 

Total liabilities and shareholders’ equity

 

$

1,550,789

 

 

$

682,837

 

REGIS CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)

For The Three and Nine Months Ended March 31, 2020 and 2019

(Dollars and shares in thousands, except per share data amounts)

 

 

 

Three Months Ended

March 31,

 

Nine Months Ended

March 31,

 

 

2020

 

2019

 

2020

 

2019

Revenues:

 

 

 

 

 

 

 

 

Service

 

$

78,387

 

 

$

181,809

 

 

$

322,133

 

 

$

580,076

 

Product

 

34,877

 

 

53,766

 

 

124,516

 

 

173,006

 

Royalties and fees

 

8,698

 

 

22,768

 

 

66,062

 

 

67,767

 

Franchise rental income

 

31,821

 

 

 

 

96,875

 

 

 

Total revenue

 

153,783

 

 

258,343

 

 

609,586

 

 

820,849

 

Operating expenses:

 

 

 

 

 

 

 

 

Cost of service

 

54,824

 

 

111,632

 

 

212,664

 

 

348,060

 

Cost of product

 

21,672

 

 

31,167

 

 

75,257

 

 

99,698

 

Site operating expenses

 

3,660

 

 

34,339

 

 

62,932

 

 

106,723

 

General and administrative

 

31,871

 

 

41,694

 

 

105,187

 

 

135,257

 

Rent

 

19,243

 

 

32,332

 

 

64,002

 

 

102,952

 

Franchise rent expense

 

31,821

 

 

 

 

96,875

 

 

 

Depreciation and amortization

 

10,359

 

 

8,630

 

 

27,486

 

 

27,732

 

TBG mall location restructuring

 

146

 

 

20,711

 

 

2,368

 

 

20,711

 

Goodwill impairment

 

44,529

 

 

 

 

44,529

 

 

 

Total operating expenses

 

218,125

 

 

280,505

 

 

691,300

 

 

841,133

 

 

 

 

 

 

 

 

 

 

Operating loss

 

(64,342

)

 

(22,162

)

 

(81,714

)

 

(20,284

)

 

 

 

 

 

 

 

 

 

Other (expense) income:

 

 

 

 

 

 

 

 

Interest expense

 

(1,712

)

 

(1,354

)

 

(4,615

)

 

(3,432

)

(Loss) gain from sale of salon assets to franchisees, net

 

(10,208

)

 

11,489

 

 

(21,760

)

 

10,394

 

Interest income and other, net

 

(1,329

)

 

464

 

 

3,188

 

 

1,453

 

 

 

 

 

 

 

 

 

 

Loss from continuing operations before income taxes

 

(77,591

)

 

(11,563

)

 

(104,901

)

 

(11,869

)

 

 

 

 

 

 

 

 

 

Income tax benefit (expense)

 

2,253

 

 

(3,248

)

 

5,904

 

 

(2,988

)

 

 

 

 

 

 

 

 

 

Loss from continuing operations

 

(75,338

)

 

(14,811

)

 

(98,997

)

 

(14,857

)

 

 

 

 

 

 

 

 

 

Income from discontinued operations, net of taxes

 

301

 

 

178

 

 

753

 

 

6,027

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(75,037

)

 

$

(14,633

)

 

$

(98,244

)

 

$

(8,830

)

 

 

 

 

 

 

 

 

 

Net loss per share:

 

 

 

 

 

 

 

 

Basic and diluted:

 

 

 

 

 

 

 

 

Loss from continuing operations

 

$

(2.10

)

 

$

(0.37

)

 

$

(2.75

)

 

$

(0.35

)

Income from discontinued operations

 

0.01

 

 

0.00

 

 

0.02

 

 

0.14

 

Net loss per share, basic and diluted (1)

 

$

(2.10

)

 

$

(0.36

)

 

$

(2.73

)

 

$

(0.21

)

 

 

 

 

 

 

 

 

 

Weighted average common and common equivalent shares outstanding:

 

 

 

 

 

 

 

 

Basic and diluted

 

35,815

 

 

40,314

 

 

35,958

 

 

42,900

 

 

(1) Total is a recalculation; line items calculated individually may not sum to total due to rounding.

REGIS CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)

For the Nine Months Ended March 31, 2020 and 2019

(Dollars in thousands)

 

 

 

Nine Months Ended March 31,

 

 

2020

 

2019

Cash flows from operating activities:

 

 

 

 

Net loss

 

$

(98,244

)

 

$

(8,830

)

Adjustments to reconcile net (loss) to net cash used in operating activities:

 

 

 

 

Non-cash adjustments related to discontinued operations

 

(967

)

 

(163

)

Depreciation and amortization

 

23,635

 

 

24,727

 

Deferred income taxes

 

(6,590

)

 

(6,034

)

Gain from sale of company headquarters, net

 

(2,513

)

 

 

Loss (gain) from sale of salon assets to franchisees, net

 

21,760

 

 

(10,394

)

Non-cash TBG mall location restructuring charge

 

 

 

20,711

 

Goodwill impairment

 

44,529

 

 

 

Salon asset impairments

 

3,851

 

 

3,005

 

Stock-based compensation

 

2,114

 

 

7,065

 

Amortization of debt discount and financing costs

 

206

 

 

206

 

Other non-cash items affecting earnings

 

(442

)

 

(492

)

Changes in operating assets and liabilities, excluding the effects of asset sales

 

(38,360

)

 

(50,074

)

Net cash used in operating activities

 

(51,021

)

 

(20,273

)

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

Capital expenditures

 

(32,331

)

 

(23,160

)

Proceeds from sale of assets to franchisees

 

87,916

 

 

54,619

 

Costs associated with sale of salon assets to franchisees

 

(1,887

)

 

 

Proceeds from company-owned life insurance policies

 

 

 

24,617

 

Proceeds from sale of company headquarters

 

8,996

 

 

 

Net cash provided by investing activities

 

62,694

 

 

56,076

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

Borrowings on revolving credit facility

 

213,000

 

 

 

Repayments of revolving credit facility

 

(30,000

)

 

 

Repurchase of common stock

 

(28,246

)

 

(105,364

)

Taxes paid for shares withheld

 

(1,968

)

 

(2,447

)

Net proceeds from distribution center sale and leaseback transaction

 

 

 

18,068

 

Distribution center lease payments

 

(677

)

 

 

Net cash provided by (used in) financing activities

 

152,109

 

 

(89,743

)

 

 

 

 

 

Effect of exchange rate changes on cash and cash equivalents

 

(379

)

 

5

 

 

 

 

 

 

Increase (decrease) in cash, cash equivalents, and restricted cash

 

163,403

 

 

(53,935

)

 

 

 

 

 

Cash, cash equivalents and restricted cash:

 

 

 

 

Beginning of period

 

92,379

 

 

148,774

 

End of period

 

$

255,782

 

 

$

94,839

 

Contacts

REGIS CORPORATION:
Kersten Zupfer

investorrelations@regiscorp.com

Read full story here